Correlation Between Cairo For and Edita Food
Can any of the company-specific risk be diversified away by investing in both Cairo For and Edita Food at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cairo For and Edita Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairo For Investment and Edita Food Industries, you can compare the effects of market volatilities on Cairo For and Edita Food and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cairo For with a short position of Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairo For and Edita Food.
Diversification Opportunities for Cairo For and Edita Food
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cairo and Edita is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cairo For Investment and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries and Cairo For is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cairo For Investment are associated (or correlated) with Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of Cairo For i.e., Cairo For and Edita Food go up and down completely randomly.
Pair Corralation between Cairo For and Edita Food
Assuming the 90 days trading horizon Cairo For Investment is expected to generate 0.56 times more return on investment than Edita Food. However, Cairo For Investment is 1.79 times less risky than Edita Food. It trades about 0.07 of its potential returns per unit of risk. Edita Food Industries is currently generating about 0.04 per unit of risk. If you would invest 1,375 in Cairo For Investment on September 12, 2024 and sell it today you would earn a total of 74.00 from holding Cairo For Investment or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairo For Investment vs. Edita Food Industries
Performance |
| Timeline |
| Cairo For Investment |
| Edita Food Industries |
Cairo For and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairo For and Edita Food
The main advantage of trading using opposite Cairo For and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairo For position performs unexpectedly, Edita Food can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Edita Food will offset losses from the drop in Edita Food's long position.| Cairo For vs. Golden Textiles Clothes | Cairo For vs. Egyptians For Investment | Cairo For vs. Paint Chemicals Industries | Cairo For vs. Mohandes Insurance |
| Edita Food vs. Misr National Steel | Edita Food vs. Delta Insurance | Edita Food vs. Suez Canal Bank | Edita Food vs. Sidi Kerir Petrochemicals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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